Estonia leads Baltic development

TALLINN - DnB bank’s analysts predict a slowdown in the economic growth of the Baltic States, singling out Estonia, which may be proud of having almost the strongest immunity to a new recession wave due to its strict fiscal discipline, low debt and stable macroeconomic situation, reports ELTA.
On Nov. 22, DnB bank’s chief analyst Rimantas Rudzkis presented growth forecasts for the Baltic economies for 2012. The forecasts show that the real GDP of Lithuania and Latvia would grow 2.5 percent each in 2012; Estonia is to see 3 percent growth.

The analyst stressed that although the Baltic States made a start from equal positions, the development differences between Lithuania, Latvia and Estonia are becoming increasingly evident. “If we searched for a clever teacher for teaching Europe how it should live, we would find Estonia,” said Rudzkis.
Estonia stands out among the Baltic States for its better prospects, whereas the economic growth of Lithuania and Latvia will mostly be hampered by the sluggish restructuring of the public sector, scant attention from foreign investors and large-scale emigration.

According to Rudzkis, Estonia has more diversified exports and it sells goods and services of a higher value added. Moreover, Estonia has expanded its export of investment services to Scandinavian countries, whereas Lithuania and Latvia have a rather lower level of services exports. The Baltic States have problems with the expansion of export markets, but Estonia still leads them, the analyst noted.

“The Baltic States find it difficult to diversify exports, but even here Estonia is still a leader,” said Rudzkis.
This year, the Baltic States are leading the economic growth of the European Union. However, the general stagnation of the EU economy will slow down the economic growth of the Baltic States, which is still to remain the most rapid across the EU, the DnB analyst predicts.